Facing future national and Air Force challenges.

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To say that we live in interesting times is an understatement. This morning I'll discuss our Air Force priorities and challenges, and then open the floor for questions. First, however, it's worth taking a moment to discuss a national challenge that will serve as context for the rest of the discussion--and that is fiscal constraint.

The nation's revenue has slowed, while its costs have increased, and the outlook is not much better anytime soon. The combined impacts of the federal debt, the aging population, and the large entitlement programs--like Social Security, Medicare and Medicaid--have begun what will, over the next several decades, become a growing strain on the federal budget, and will likely impact the dollars available for defense.

The Congressional Budget Office estimates annual interest payments on the federal debt alone could equal current defense spending by 2020. Additionally, the number of people eligible for Social Security benefits will grow at a rate of 4 million per year through 2026. Finally, the Congressional Budget Office estimates that the combined effects of increased interest and entitlement payments will mean that the Federal government will need an additional 5 percent of the GDP just to cover medical-related increases. As a result, the decisions that challenge us now will only get more difficult, making the proper prioritization of resources even more critical.

The good news is that we have recently concluded a number of DOD-level reviews providing strategic guidance in key areas such as Nuclear and Space Posture and Ballistic Missile Defense. Most importantly, the overarching Quadrennial Defense Review established four U.S. defense priority objectives that will guide us: prevail in today's wars, prevent and deter conflict, prepare to defeat adversaries and succeed in a wide range of contingencies, and preserve and enhance the all-volunteer force. …

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